"Trade tensions have escalated, policy uncertainties have increased in a number of countries, and some emergingmarketeconomies are facing financial-market pressures", Tobias Adrian, Financial Counsellor and Director of the Monetary and Capital Markets Department of the IMF, said.

"There are clouds on the horizon".

The IMF warned that the world faced a permanent hit to growth if the United States followed through on a threat to impose a 25% on all imported cars, and global tariffs hit business confidence, investment and borrowing costs.

Before his departure for Bali, Indonesia, for attending the annual meeting of IMF/WB from Oct 8 to 14, Federal Minister for Finance Asad Umar announced the government's decision for approaching the IMF for getting the 22nd programme of the Fund.

The IMF added interest rates would need to be increased to deal with inflation but it warned the Bank of England to be flexible so it could change depending on the situation.

How bad could the trade war get? "Our analysis suggests that - in the medium term - there is a 5 per cent probability that emerging market economies will experience portfolio debt outflows of United States dollars 100 billion or more".

It now projects the MENA region to grow by 2.0 percent this year and 2.5 percent in 2019, 1.2 percent and 1.1 percent lower, respectively, than it forecast in April.

The IMF's cut to its outlook was broad-based.

The IMF had in its World Economic Outlook report in July projected that Nigeria's economy would grow by 2.1 per cent in 2018 and 2.3 per cent in 2019.

That includes President Donald Trump´s imposition of tariffs on $250 billion in Chinese goods, as well as on aluminum, steel and other products worldwide.

The IMF said the balance of risks was now tilted to the downside, with a higher likelihood that financial conditions will tighten further as interest rates normalize, hurting emerging markets further at a time when US -led demand growth will start to slow as some tax cuts expire.

The IMF also predicted that Bangladesh's consumer prices would reach 5.8 percent at the end of this year and 6.1 percent next year. However, it has considerably reduced its economic growth forecast for 2023 to 1.2 percent, from 1.9 percent in its previous report.

Several emerging markets had their forecasts cut, including Argentina, Brazil, Iran and Turkey, reflecting factors including tighter credit.

Emerging Asia continued to register strong growth, supported by a domestic demand-led pickup in the Indian economy from a four-year-low pace of expansion in 2017, even as activity in China moderated in the second quarter in response to regulatory tightening of the property sector and non-bank financial intermediation, it said. Core inflation, which excludes volatile items such as energy, will vary from country to country, it said.

The IMF's projection is close to the World Bank's forecast of 7 percent for fiscal 2018-19, released on Oct 2.